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kramer
3 years ago
6

You are in negotiations to make a 7-year loan of $35,000 to DeVille Corporation. To repay you, DeVille will pay $2,500 at the en

d of Year 1, $5,000 at the end of Year 2, and $7,500 at the end of Year 3, plus a fixed but currently unspecified cash flow, X, at the end of each year from Year 4 through Year 7. You are confident the payments will be made, since DeVille is essentially riskless. You regard 8% as an appropriate rate of return on a low risk but illiquid 7-year loan. What cash flow must the investment provide at the end of each of the final 4 years, that is, what is X?
Business
1 answer:
Law Incorporation [45]3 years ago
5 0

Answer:

The payments will be for  8,536.485 to achieve an 8% return on the investment.

Explanation:

we will calcualte the value of the loan at the beginning of year 4:

carrying value x (1+rate) - payment = year-end carrying value

((35,000 x 1.08 - 2,500) x 1.08-5,000) x1.08-7,500 =

(35300 carrying value at 1st year-end x 1.08-5,000) x1.08-7,500 =

33124 carrying value at 2nd year-end x 1.08-7,500 = 28273.92

Now, this will be paid with a 4 years annuity of equal payment at 8% discount rate

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV  $28,273.92

time 4 years

rate         0.08

28273.92 \div \frac{1-(1+0.08)^{-4} }{0.08} = C\\

C  $ 8,536.485

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Yojayna works for a manufacturing company. She meets with her boss once a week to review how well the company is meeting the tac
anygoal [31]

Answer:

She is a middle manager

Explanation:

As for the details provided,

Yojayna has a senior manager, to whom she meets once in every week to discuss the plan, and the achievements so far.

Thus, she is not the top most manager.

Further, she coordinates with supervisors who regulate the operations of employees on daily basis.

Thus, she is a manager to them.

Therefore, she is a middle level manager. Who works according to senior management, and then regulates the work of supervisors also.

8 0
3 years ago
A payment is said to be ________________ if it is automatically adjusted for inflation. cross referenced indexed matched maintai
defon
<span>The payment is said to be indexed. Indexing a payment means that the income payments are adjusted by a price index. This is to maintain the purchasing power of the public when inflation hits. This is a type of monetary correction.</span>
5 0
3 years ago
Say that the original supply curve for avocados is the curve labeled S and the demand curve for avocados is the curve labeled D.
DaniilM [7]

Answer:

D. supply increased and quantity demanded increased.

Explanation:

When supply curve moved from s to s1 , supply increased . demand curve did not move . Then the new equilibrium will shift towards the lower price with demand also showing increasing trend to balance supply but at lower price.

4 0
3 years ago
Travis bought a share of stock for $31.50, the stock paid a dividend of $0.85, and Travis sold it six months later for $27.65. W
Luden [163]

Answer:

Dollar profit loss = $3

Holding period return = negative 9%

Explanation:

In order to find the dollar profit or loss return we will add the dividend and selling price because that the dividend plus the selling price is the cash that Travis receives or the positive cash and we will subtract the buying price from it because it is the negative cash flow. So we will add all the positive cash flows and subtract negative cash flow from it in order to find the dollar profit loss or return.

Selling price = 27.65

Dividend = 0.85

Selling price + Dividend= 28.5

Selling price = 31.50

Dollar profit loss or return = 28.50-31.5=-3

Loss= $3

In order to find the holding period return we will divide add the dividend and selling price , subtract buying price from it and then divide it by buying price.

(27.65+0.85-31.5)/31.5= -0.09 = -9%

Holding period return = negative 9%

5 0
2 years ago
You are considering the purchase of a new machine to help produce a new product line being introduced. The machine is expected t
miss Akunina [59]

Answer:

A. 4.3 batches

B. 215 parts

C. 3 batches

D. 184 parts

Explanation:

Please find explanation attached

7 0
3 years ago
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